Euro$ interest rate options: some bullish positioning in block trade Euro$ interest rate options: some bullish positioning in block trade was reported in the form of purchases of 15k in September 95/96 call 1x2s and 3k in September call 2x3s. Otherwise it was a pretty quiet start, say sources, with the bullish sale of 1.5k in Short March 88 puts as well. The June 2015 contract is a half-tick higher near 99.57, while the deferreds are mixed ranging from -0.5 to +3 ticks.

Market opens slightly lower after housing, industrial production dataStock futures traded slightly below fair value throughout the pre-market trading session, with little help from the early economic reports, which included lower than expected housing starts and industrial production growth. The focus will now be on this afternoon’s release of the minutes from the January FOMC meeting, which are scheduled for release at 2:00 pm EST. In early trading, the Dow is down 34 points, the Nasdaq is down 2 points and the S&P is down 3 points.

09:35 EDT

The 2.0% January U.S. housing starts drop The 2.0% January U.S. housing starts drop to a 1.065 M clip tracked estimates, after small downward revisions that left a small disappointment, alongside a 0.7% permits drop to a 1.053 M rate that reflected a new series based on a 2014 "universe" of places that require permits, versus 2004. January housing starts weakness was led by the single family component, which fell 6.7%, and with starts in the Midwest, which plunged 22% due to harsh weather. The weather has had an oscillating effect on data this winter, as a harsh November was followed by a mild December, but then harsh weather again in January and February. These gyrations were documented by the industrial production report's utility figures, given a 2.3% January bounce after a 6.9% December decline but 3.6% November rise. Beyond weather, the single-digit pace of the housing market recovery since 2013 is disappointing, as the sector faces an ongoing headwind from mortgage market dysfunction and investor caution. Analysts now expect growth for starts under construction of 14% in Q1 that matches the 14% (was 15%) rate in Q4, and our Q1 GDP estimate remains at 2.5%.

Redbook Store Sales data reportedWeek of 2/14 Redbook Store Sales up 3.2% for the year

09:00 EDT

FX Action: USD-CAD found support into the 1.2400 level FX Action: USD-CAD found support into the 1.2400 level through the London morning session, and rallied to intra day highs of 1.2456 in early North American dealings. The move came as WTI crude touched intra day lows of $52.24, after peaking at $53.36 in London. Soft U.S. PPI data helped the USD in general a bit lower, which offset the better Canadian wholesale data, taking USD-CAD back into 1.2425.

The 0.8% U.S. January PPI drop The 0.8% U.S. January PPI drop with a 0.1% core price decline undershot estimates thanks to a 0.8% plunge in transportation and warehousing service prices that allowed a 0.2% drop for service prices overall. Analysts saw the expected big 2.1% January goods price drop with declines of 10.3% for energy and 1.1% for food. Analysts expect a 0.1% PPI drop in February with a 0.1% core price rise, though if the early-February bounce in oil and gasoline prices continues analysts may need to raise these estimates into month-end. On the old SOP basis, analysts saw a 2.1% headline PPI plunge that followed decreases of 1.1% in December and 0.8% in November, alongside a 0.2% core price rise. Last Friday's trade price report revealed a huge 2.0% January export price plunge that accompanied an oil-led 2.8% import price decline, alongside core price declines of 0.4% for exports and 0.6% for imports. Analysts still expect 0.5% headline declines for both CPI and PCE chain prices, with a 0.1% core price gain for CPI and a flat PCE core figure.

U.S. housing starts slid 2.0% to 1.065 M in January U.S. housing starts slid 2.0% to 1.065 M in January, a little better than expected, following December's 7.1% jump to a 1.087 M clip (revised from 1.089 M), with November bumped down to 1.015 M from 1.043 M previously. Building permits fell 0.7% to a 1.053 M rate from a revised 1.058 M previously (was 1.032 M). Single family starts dropped 6.7% and multifamily starts rose 7.5% last month.